1036.HK WACC - Weighted Average Cost of Capital

The WACC of Vanke Overseas Investment Holding Co Ltd (1036.HK) is 6.6%.

The Cost of Equity of Vanke Overseas Investment Holding Co Ltd (1036.HK) is 6.55%.

The Cost of Debt of Vanke Overseas Investment Holding Co Ltd (1036.HK) is 10.85%.

	Range	Selected
Cost of equity	5.50% - 7.60%	6.55%
Tax rate	23.00% - 33.30%	28.15%
Cost of debt	4.00% - 17.70%	10.85%
WACC	5.5% - 7.7%	6.6%

WACC

1036.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.44	0.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	7.60%

Tax rate	23.00%	33.30%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.00%	17.70%

After-tax WACC	5.5%	7.7%


Selected WACC	6.6%

1036.HK's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 1036.HK:

cost_of_equity (6.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.